Viewpoint: Stablecoin Regulatory Uncertainty May Put Banks in a More Disadvantageous Position, Deposits May Face Migration Pressure Due to Yield Differences

Odaily Planet Daily News: Financial technology company Mega Matrix’s Vice President of Capital Markets, Colin Butler, stated that regulatory uncertainty surrounding stablecoins could put traditional banks at a greater disadvantage compared to crypto companies. He pointed out that many banks have invested heavily in building digital asset infrastructure, but until regulations clarify whether stablecoins will be classified as deposits, securities, or standalone payment tools, boards and compliance departments find it difficult to approve full deployment. Currently, several large banks have already taken related steps, such as JPMorgan Chase’s Onyx blockchain payment network, BNY Mellon’s digital asset custody services, and Citigroup’s testing of tokenized deposits. However, Butler noted that regulatory ambiguity limits the scale of these investments, while crypto companies have long operated in a gray regulatory environment and are more adaptable.

Additionally, the profit gap between stablecoin platforms and bank deposits may also drive fund transfers. Butler said that most trading platforms offer about 4% to 5% returns on stablecoin balances, whereas the average savings account yield in the U.S. is less than 0.5%. Funds tend to move quickly when higher yields become available. He also warned that if regulators restrict stablecoin yields, funds might be pushed toward less regulated structures, such as synthetic dollar tokens like USDe that generate returns through derivatives strategies, thereby directing capital to offshore markets with lower transparency.

Sygnum Chief Investment Officer Fabian Dori believes that although the competition gap between banks and crypto platforms is widening, the likelihood of large-scale deposit outflows in the short term remains limited. However, he pointed out that once stablecoins are viewed as yield-generating digital cash, banks will face more significant competitive pressure. (Cointelegraph)